Pension Funds At Work

SEPT 2007 - This July, the Commonwealth’s pension investment board, PRIM, funded $50 million to the AFL-CIO Housing Investment Trust (HIT) as part of the Economically Targeted Investment (ETI) program. The HIT is headquartered in Washington DC. The firm has managed assets for US tax-exempt clients since 1984 and currently has 393 institutional investors, many of which are public pension funds.

The AFL-CIO HIT is a fixed income fund that overweights credit enhanced
fixed income securities, in particular, multifamily mortgage-backed
securities that carry a US government or agency guaranty. The HIT fund
has created or preserved more than 80,000 units of housing across the
country and generated approximately 50,000 union jobs in construction
and related industries, including 1,500 housing units in Massachusetts
and 2.4 million hours of work for union members in the Commonwealth.

HIT currently has under review a $100 million pipeline of prospective
housing projects in Massachusetts, to which it expects to add in coming
years. From the pipeline, the HIT expects to invest at least $50
million in the Commonwealth over the next three years. These
investments will create needed housing for working families and persons
with special needs, including low-income, elderly, disabled, and
homeless persons.

The HIT has generated market-rate returns while also achieving
important secondary investment objectives of promoting housing and good
jobs in local communities. The HIT’s investment record demonstrates
that social and economic objectives can be achieved without diminishing
performance or investment security.

In the accompanying photo: Rollins Square, Phase I, in Boston’s South
End. This is a $43.9 million project of which $30.02 million was HIT